The world’s largest money management company, BlackRock, will allegedly announce layoffs affecting 600 workers worldwide, or around 3% of the workforce.
With this move, BlackRock is preparing for the Securities and Exchange Commission (SEC) of the United States to approve its spot Bitcoin exchange-traded fund (ETF).
Even though the internal description of the layoffs is “routine,” they occur following a time of sharply increasing assets under management (AUM). In the upcoming days, a statement regarding the layoffs is anticipated.
The planned elimination of about 600 jobs is similar to BlackRock’s strategy from the previous year, in which layoffs were based on factors related to employee performance.
BlackRock’s stock recovered in 2023, climbing 6%, after declining by 21% in 2022. A Fox Business article claims that a BlackRock representative declined to comment on the layoffs.
The business will release its fourth-quarter (Q4) financial results on Friday.A plausible explanation for the layoffs could be that BlackRock is entering a more mature stage of its business after years of strong growth in Assets Under Management (AUM).
The Q4 analyst consensus predicts that earnings will drop by 2.46% year over year to $8.71 per share. BlackRock’s AUM was $9 trillion at the end of the third quarter of 2023, less than its peak of almost $10 trillion in 2022.
The asset decline also happened when BlackRock came under political fire for implementing Environmental Social Governance (ESG) investing. As part of this approach, investment funds are allocated to publicly traded companies in the sustainable energy industry or those actively engaged in lowering their carbon footprint.
Additionally, corporate governance practices, including boardroom diversity, are encouraged. Nevertheless, BlackRock’s healthy Exchange Traded Fund (ETF) sector saw a significant inflow of $187 billion. ETFs are securities that are tracked and traded on major exchanges.
BlackRock’s Bitcoin ETF Approval
Should the SEC grant the company’s application for a spot in the Bitcoin ETF, BlackRock will be among the leading asset managers to provide a cryptocurrency investment product.
BlackRock is expecting approval on January 10th, which also happens to be the SEC’s deadline for approving or rejecting the ARK 21 Shares spot Bitcoin ETF.
On the other hand, BlackRock’s Bitcoin ETF filing has a deadline of January 15th imposed by the SEC. This comes after applicants for spot Bitcoin ETFs have recently submitted several revision filings.
In line with other asset managers such as Valkyrie, Grayscale, Bitwise, Hashdex, ARK 21Shares, Invesco Galaxy, Fidelity, Franklin Templeton, VanEck, and WisdomTree, BlackRock filed a 19b-4 amendment for its spot BTC ETF application on January 5th.
Completing S-1 documentation is necessary for U.S. exchanges to list shares of investment instruments that are directly exposed to cryptocurrencies, even if these filings constitute significant stages in the SEC clearance process.
